EUR unchanged despite hawkish Lagarde

ECB President Lagarde's latest comments did not cause much volatility on the markets. As expected head of the ECB remains hawkish, emphasizing the need for further tightening. The market is pricing in a 90% chance of 50 bps at the February meeting with the remainder at 75 bps.

Key takeaways from Lagarde speech: 

• We have stated unequivocally that ECB interest rates must continue to rise significantly and steadily.

• Europe's inflation rate is far too high.

•  We must reduce inflation and we will meet this objective.

• As an economy that is very open to trade and deeply integrated into global supply chains, we are vulnerable to geopolitical headwinds.

EURUSD rose slightly and is testing local resistance at 1.0870. Source: xStation5